As a business owner, the end of the year is marked by many HR and tax-related responsibilities. Use this checklist to help you close out 2016 and prepare for 2017:
- Refer to ADP's year-end payroll guide. The guide has clearly defined payroll tasks listed by month (including verifying company and employee contact information for W-2s) and tips and resources on topics related to bonuses, the Affordable Care Act (ACA), fringe benefits, and more. Access the guide here.
- Comply with new overtime rules. Updated: On November 22, 2016, a federal judge temporarily blocked the Department of Labor from implementing and enforcing the rules discussed here. Learn more.
- Prepare for ACA reporting (if applicable). The ACA requires insurers, small employers with self-insured health plans, and employers with 50 or more full-time and full-time equivalent (FTE) employees to report certain health coverage information to the IRS and employees annually. Determine whether you are required to report in 2017 (for the 2016 calendar year) by looking at your employee count in 2015 and the type of health plan you have. If your company is subject to ACA reporting, start gathering necessary data in order to meet the applicable deadlines. For more information, see our ACA Reporting Road Map.
- Update posters. Workplace posters may change to reflect new laws or regulations or new contact information for a government agency. Note that many states and local jurisdictions have new minimum wage rates for 2017. These laws typically require employers to display an updated minimum wage notice.
- Update state and federal forms. State and federal forms also change from year to year. For example, the IRS typically updates its Form W-4 annually. Most states also issue new withholding allowance certificates. Additionally, the United States Citizenship and Immigration Services (USCIS) is releasing a new version of the I-9 Form, which employers must begin using by January 22, 2017.
- Distribute annual notices. Certain states require that employers provide annual notices to their employees. New Jersey, for example, requires covered employers to distribute a Conscientious Employee Protection Act (CEPA) notice and a Gender Equity notice (for employers with 50 or more employees) to their employees annually. In addition, some states, such as California, Illinois, New Jersey, and Texas, require that employers distribute a notice concerning the Earned Income Tax Credit (EITC) on an annual basis. Note: California now requires employers to notify employees of both the federal and state EITC. Review your state laws to ensure you have distributed, or are prepared to distribute, all required notices.
- Maintain OSHA logs. The Occupational Safety and Health Administration requires certain employers to keep records of work-related injuries and illnesses and post Form 300A in the workplace every year from February 1 to April 30. Employers with 10 or fewer employees and employers in certain low-hazard industries are exempt from these recordkeeping requirements. Note: Some employers will be required to file certain OSHA records electronically beginning in July 2017.
- Carryover vacation, if required. A number of states and local jurisdictions require vacation and certain other types of paid time off to be carried over from year to year. If your company is covered by one of these requirements, prepare to carryover your employees' accrued but unused vacation and other paid time off into 2017.
HR Best Practice Checklist:
- Confirm independent contractor classifications. The misclassification of employees as independent contractors is a major area of enforcement for government officials. For workers to be considered bona fide independent contractors, very specific federal and state tests must be satisfied. If you plan to use independent contractors, make sure you apply the proper tests. If you already work with independent contractors, evaluate current relationships since they may have changed over time.
- Review policies. Changes in laws or company practices may require you to update your workplace policies. Use the end of the year as an opportunity to review your policies to confirm that they comply with current employment laws and reflect your company's current benefits and practices. Whenever you make updates, distribute the revised handbook to employees and obtain and store employee acknowledgments.
- Comply with the NLRA. In recent years, the National Labor Relations Board (NLRB) has scrutinized employer policies and practices that may infringe on employees' rights to work together to improve wages and working conditions (Section 7 rights). For example, the NLRB views policies that explicitly or implicitly prohibit employees from discussing their pay as unlawful. Additionally, some states and local jurisdictions have enacted laws that expressly prohibit pay secrecy policies. Review policies related to social media, confidentiality, and standards of conduct to ensure they provide sufficient details and context to make it clear that they don't infringe on employees' rights.
- Review employment applications. In 2016, a number of states and local jurisdictions enacted laws that generally prohibit employers from asking about criminal history on employment applications. Additionally, the Equal Employment Opportunity Commission recommends that employers avoid asking for such information on employment applications. For these reasons, review your standard employment application to ensure compliance.
- Update job descriptions. Review and update your job descriptions to make sure they accurately reflect the roles and responsibilities of the positions in your company. Use job descriptions to help set expectations with new hires, assess performance, make compensation decisions, identify training needs, and evaluate potential reasonable accommodations when necessary.
- Create a holiday calendar. If your company observes certain holidays, create a holiday calendar for 2017 and distribute and/or post it before the end of 2016. Additionally, the end of the year is a good time to remind employees of your holiday policy, including which holidays are paid and when the company will be closed in observance of Thanksgiving, Christmas, or other holidays. Consider updating and redistributing your holiday policy before the end of the year.
Devoting the time and resources to prepare for year-end can help you start 2017 on the right foot. ADP has many resources that can help you, including the Year-End Payroll Guide, ACA Reporting Road Map, and Final Overtime Rules Guide.